Black Tuesday of cryptocurrencies or why Bitcoin went into a peak
Such a new investment direction as cryptocurrencies has caused a huge stir among traders, investors and ordinary people.
An unknown electronic currency like Bitcoin reached its maximum in 2017 and cost about 20 thousand dollars.
Agree, for an asset that was worth nothing five years ago, the growth to the 20 thousand mark was simply phenomenal, moreover, none of the investors will remember such growth in such a short time.
Why did this happen? Because Bitcoin offers an alternative to the existing monetary system, complete confidentiality, tax protection and, most importantly, an uncontrolled flight of the exchange rate, which cannot be influenced by any bank or government in the world.
But how justified is the exchange rate of this crypto currency today?
The viability of cryptocurrency as an independent unit is under huge question; everyone is already accustomed to enormous volatility, but the real strength of a currency is demonstrated not by price jumps, but by a stable exchange rate.
January 2018, to be more precise, Tuesday the 16th, turned out to be a kind of Black Tuesday, as all currencies fell by 25 percent or more.
Unfortunately, Wednesday, January 17, turned out to be no less tragic, since today bulls and bears are fighting around the level of 10 thousand dollars per bitcoin, and the downward trends have not disappeared.
Everything would be fine, but panic gripped the cryptocurrency market, which led to a sharp decrease in the capitalization of the entire segment. This was the reason for such a collapse and why the desired rollback does not begin?
Unfortunately, the end of 2017 and the beginning of 2018 was very saturated with negative news for Bitcoin and crypto currencies in general.
The beginning of the epics was the appearance Bitcoin futures on the stock exchange. On the one hand, the appearance of such an asset on a reputable platform should attract huge capital, accelerate growth and, most importantly, reduce volatility, as capitalization has increased.
However, the old investment world is harsh, and it is very difficult for assets without evidence of real value to gain trust.
Therefore, the first strong blow to Bitcoin was made by Warren Buffett, who called the cryptocurrency an ordinary soap bubble, which awaits the fate of such assets.
Naturally, such a statement led to the fact that futures were not only bought, but also actively sold. The confrontation between market makers and the crowd always causes volatility!
The next factor that caused the fall on Tuesday was the emergence of the so-called “BANA” or in simple words a complete ban on cryptocurrency trading in China. According to some reports, the Chinese hold about six percent of all cryptocurrencies.
However, the parade of bad news was not limited to China; a number of bills have appeared to tighten regulation or completely ban the activities of cryptocurrency exchanges in South Korea.
A week earlier, France and a number of EU countries spoke out for active regulation of Bitcoin and the cryptocurrency market; moreover, a similar topic was promised to be raised at the G20 summit.
Considering that the blockchain technology itself is based on anonymity, and the nature of the crypt itself is such that it will only be viable if users are completely anonymous, the threat of being banned or regulated in the EU countries is tantamount to collapse.
Also, on the 17th of January, many will remember another negative news - the collapse of the Bitconnect exchange.
Many developers criticized this site, but after checking with a number of US regulatory authorities, it turned out that the site was nothing more than a pyramid that was deceiving people.
Patterns of Bitcoin. No panic
Enormous growth, and especially at a high rate, greatly dulls the investor’s instinct of self-preservation and his caution.
It’s quite difficult to get used to the sharp drops in the chart, when for a whole year Bitcoin was flashing in the news feeds with record historical figures.
However, it is not worth it due to the arising corrections panic, because if you look into the past, you can see that Bitcoin and key cryptocurrencies are not the first to experience such a fall.
Moreover, such panic sentiments have always become the starting point for growth and renewal of new price highs.
Many people now have a completely logical question: what to do? Will panic overcome common sense?
In fact, if you rely on the investment and trading rules of the world's strongest investors, it turns out that they earned their capital during such panics by making purchase transactions.
Such a decrease in the value of cryptocurrencies is just an excellent chance to buy cheaper, and the fall of Ripple and Ether along with Bitcoin by more than 20 percent will allow you not only to earn money, but also to diversify risks.
It is recommended to set pending buy orders, which will work with the beginning of growth, and if the price continues to fall, the transaction simply will not take place.
Therefore, if you previously did not have money or the desire to take risks due to the enormous cost of Bitcoin, now is the time, because panic is a time of enormous opportunities!